One in 10 advisers confident retaining clients' family wealth

One in 10 advisers confident retaining clients' family wealth

Just one in ten advisers are confident they would retain assets under advice when wealth is transferred to a clients’ family members, research has shown.

Some 46 per cent of advisers surveyed by Octopus Investments do not think they would keep their clients’ assets when they are inherited by family members.

This is despite 67 per cent of those inheriting a significant sum of money saying they intend to seek financial advice, and 75 per cent saying they were open to using the same adviser as their family.

For those inheriting wealth from family members, 56 per cent said they would use the same adviser because they had provided good advice and increased their family’s wealth.

Octopus conducted research to examine the relationships between the financial advice industry, advised clients and their families, and what happens when wealth is transferred to spouses or children.

The company, which is part of Octopus Group, surveyed 506 financially advised clients, 201 IFAs, and 1,004 wealth recipients between March 29 and April 6 2022.

Chief executive of Octopus Investments, Ruth Handcock, said this showed a "wide gulf" between the financial advice industry and those inheriting wealth. 

“The new beneficiaries of wealth are clearly really positive about the role for financial advice as they inherit in the years ahead.”

Advisers should take this as a boost of confidence and a signal that there are ripe opportunities to build meaningful relationships with wealth beneficiaries, she said. 

“However, without proactive strategies in place to do so, those chances could be in jeopardy.”

The research also showed that of those who wouldn’t use the same adviser as their family, 40 per cent of female spouses said it was because they had another adviser they would use, compared with 29 per cent of male spouses.

Only 5 per cent of financial advisers surveyed had a dedicated strategy for advising and retaining women.

Handcock said she believes advisers should have personalised strategies for women.

“Trust and connection are powerful feelings when it comes to emotive topics like money and wealth. 

“People are far more likely to engage with financial advice when they feel they’re being advised by someone who truly understands their hopes, dreams and fears.  

“Beyond prioritising diversity, I have seen some great strategies implemented by forward-thinking financial advisers, including spousal strategies, where advisers ensure there is a relationship with both members of a couple, and tailoring events specifically to things they think women will appreciate and enjoy.”